The Loan Process Basics
The Loan Process Basics are a great place to start and at a minimum will help the consumer ask the right questions.

Beginning the Loan Process:

1. Identify financial goals and concerns – this important and often ignored step identifies the consumer’s personal financial goals and concerns for the future so that the home loan may be structured within a strategy to support those goals. “A mortgage of any kind must fit into a larger financial picture.”

2. Gather the facts – Learn what your credit score is and what information is on your credit report; complete a loan application; determine how much you will budget monthly for a mortgage; identify your checking, savings accounts, and what type of assets you have that will be credited as reserves. This information will set your loan up for success from the start. Identifying these items up front will reduce nearly all changes or surprises by the end of the loan.

3. Review Loan Programs – a good standard is to compare at least three loan programs and proposals in order to determine which is the best fit for the buyer.

4. The loan is submitted to a lender – At the point the loan is submitted to the lender, all research about the loan, the lender and the particular guidelines required should be complete. Generally, loans that are submitted with careful consideration of the details, will see an approval within 24 to 48 hours.

5. A loan approval generally includes several conditions which must be met before loan documents will be issued. Conditions may vary from simple items such as wanting to see a copy of the home insurance or a bank statement to more complicated issues of additional appraisal requests.

6. Loan Documents cannot be drawn until all loan conditions are met. A consumer looking to close a loan quickly will make themselves available to obtain all requirements for the conditions. Once the loan documents are drawn, consumers usually have a designated period of time until the documents will expire. Consumers should sign within the designated period of time.

7. Funding and Recording – after the documents are signed they are returned to the lender for one additional review, if everything has been signed correctly and all funding conditions have been met, the lender will fund the loan. All loans must be recorded in the county in which the property is located. Recording usually takes place the day after the loan funds.

For more information contact Home Smart Benefit Program.